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Accelerating Digital Transformation in the Wholesale Distribution Industry

In May of this year, Daniel Newman and Fred McClimans, analysts from Futuram Technology Insights, published a white paper on the above topic in collaboration with SAP. The point of this blog is to summarize the paper, and to encourage you to download the document and read it in its entirety.

The paper helps distributors get insight to opportunities to overcome barriers and challenges to innovation, and to leverage those innovations to improve core operations and to reimagine their businesses. It highlights why distributors should select, implement, and leverage technologies that work together to enable innovations that help them embrace new and alternative business models and processes. Below are some of the key points I found compelling in each section of the paper.

State of the Industry:

Distributors are focusing on becoming more agile, nimble, and efficient. They are also becoming more customer centric, working to provide a more personalized experience across an omnichannel environment. They are also leveraging the power of data to provide insights into internal operations, as well as into customer requirement and segmentation. They are also extending sensor-based inventory management, their e-commerce channel, and renewable service offerings.

Industry Challenges:

Distributors are challenged to improve profitability due to encroaching competitors, to improve their ability to offer personalized services and outcome-based customer experiences. They need new technologies to create and expand a digital ecosystem. They need a common digital core for sales, purchasing, supply chain planning and execution, and finance to coexist in a single system of record. They also need agility to connect all aspects of the partner ecosystem, including suppliers and customers.

The Value of Innovation:

The traditional approach to success and profitability in the wholesale distribution industry centered on operational efficiency and supply chain management. But that approach now needs to extend through to customer engagement and services innovation. It now also involves predictive models that leverage machine learning to anticipate shifts in demand and allow for more informed decisions that can be based on real-time data and insights from both suppliers and customers. A true digital core can allow for increased market awareness, agility, and decision making around product and delivery strategies.

Taking the Next Step:

  1. Work to improve your core business to better differentiate your company.
  2. Work to remove human bias and errors, and leverage data drive smarter business decisions.
  3. Work to truly understand the current and emerging behaviors of customers to generate new business models and processes.

I found the Accelerating Digital Transformation in the Wholesale Distribution Industry white paper valuable and informative. It helps educate distributors on how game-changing technology is evolving at an incredible pace, and on how the decisions they make can have a profound impact on the company’s future. The link to the white paper is below.

http://sapinnovate.me/leonardo/?view=researchreports&industry=wholesaledistribution

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